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Cengage Learning (EMEA) has reported turnover of £48.2m in the year to end March 2015, with a profit after tax of £4.2m.
Direct comparison to the previous 12 months is not available, because the last report covered nine months only (to end March 2014); however for that period turnover stood at £34.1m, with profit after tax higher at £4.8m.
The report, from company director D L Rae, said the year to March 2015 was "a positive one", with turnover growing compared to the same period in the prior year, and profitability continuing "on acceptable levels". However the report said the company had had to cope with the results of the US Supreme Court's ruling on the Wiley versus Kirtsaeng case in March 2013, which had led parent company Cengage Learning Inc to implement a minimum price on many bestselling products outside of the US in order to protect its higher margin domestic business.
Cengage Learning EMEA Limited had developed a policy of "negotiating specific exemptions, offering substitutions, digital product, localised product and older editions", as a response to the move, which "has proved successful," said the report. The company was also monitoring its sales, operational and administration groups to ensure "the most efficient operational structure", again to mitigate the impact of minimum prices on future trading profits.
But continuing high prices for US-sourced titles was likely to impact sales revenues unfavourably in the future, with the risk of loss of market share given that some of the company's direct competitors were not subject to this minimum pricing, the directors' report warned. "The company aims to mitigate this risk by driving the transition from print to digital, negotiating specific Price Floor exemptions and investing in indigenous publishing," said Rae.
Market conditions remained "a challenge" with flat university enrolments in core Western Europe markets and budgets under pressure in education and libraries. Cengage Learning EMEA also faced economic and political difficulties in some counties, the report said.
The company was investing "considerable time and resource" into developing digital products as the market demand from print to digital accelerates, it added. Digital media, as well as indigenous publishing, and not subject to Cengage Learning's International Price Floor, the report noted.
Cengage Learning EMEA will also "look to improve profit margins through vendor negotiations, consolidation of systems and processes and the cessation of unprofitable lines of business", with a renewed focus on the English Language Teaching (ELT) and Library Research business units.